How do you determine if you are tax resident in the UK?

Tax residence in the UK brings both advantages and disadvantages depending on your circumstances and your objectives.

For most individuals, determining where you are tax resident is straight forward as where you live most of time usually resolves the issue. But for some who have a less settled lifestyle, as either internationally mobile or a perpetual traveller, the position is more complex.

Even if you are UK tax resident, if you are not domiciled in UK, then the special remittance basis of assessment may apply to limit your exposure to tax. And there is also the possibility, that a Double Tax Treaty might displace tax residence in the UK in favour of tax residence in another country.

But how do you determine if you are tax resident in the UK? The response is to consider the Statutory Residence Test, which includes provisions for both Automatic Overseas Residence and Automatic UK Residence. If neither of these tests determines your UK tax residence, then there is the Sufficient Ties Test which takes into consideration the number of connections you have to the UK. If you have to fall back on this test, then the number of ties will determine the number of days you can spend in the UK before becoming UK tax resident.

Whilst for most individuals the Statutory Residence Test will determine whether they are tax resident in the UK, for those with more complex financial affairs or those seeking to remain not resident for tax purposes in the UK, the relevance of the intricacies and ambiguities in the Statutory Residence Test to your circumstances will need careful examination.

As experienced tax accountants, you can rely on Ritchie Phillips to get to the heart of your UK tax residence status, which in turn will allow you to make strategic decisions in relation to your financial affairs.